[Eric] earns $200,000 a year working one day a week in a medical clinic. But his real love is teaching, which he does one day a week at a university; this earns him $100,000 a year.

WHAT?!

“It is financially possible for them to do the things that are important to them, although by doing so, they will run a cash flow deficit of $50,000 a year until the children leave home,” Mr. MacKenzie says. Over time, their annual deficits will add up to more than $1-million in additional debt.

WHAT?!

They are living rent free in a relative’s house (they pay taxes, utilities and upkeep) and “regret not having bought a house years ago,” Eric writes in an e-mail.

WHAT?!

Eric and Ilsa are fortunate because their parents are willing to put a home equity line of credit on their own home to extend them the $1-million they need to build, and to finance their annual deficit, the planner notes.

Consumer debt loads and house prices that could be as much as 30 per cent overvalued are the two biggest risks to Canada’s economy, the Bank of Canada warned in its semi-annual Financial System Review on Wednesday.

Yeah, but “up to 30 percent” includes zero percent over-valued too you know? Surely not everyone is overpaying for Canadian real estate.

The bank says it’s about 95 per cent sure that house prices have been overvalued by an average of about 10 per cent since 2007. That’s based on a new forecasting model the bank says it created, which incorporates existing data from private banks and other government institutions.

And a lot of those inflated house prices are coming at a cost of rising debt loads. About 12 per cent of Canadian households are considered to be extremely indebted — which means they have a debt-to-income ratio of at least 250 per cent. That ratio has doubled since 2000, the report notes.

Oh.

But that’s ok because younger buyers are building equity right?

Young homeowners, the bank added, have become even more vulnerable to negative shocks to income and to higher interest rates.

Wow. What a buzzkill.

*For those who followed the foreigner link we would like to offer our sincerest apologies. If you are a glutton for punishment, here’s a video of our prime minister singing Guns n’ Roses “Sweet Child o’ Mine“. If you watch the whole thing you earn a cookie! If you cut it off at 3:33 you have to go to work at a Tim Hortons in Fort Mac. You have been warned.

Over the weekend we found out that a bearish poster on this site just bought a house. Not in Vancouver mind you, but still..

What went wrong? Landlord wanted to move back in. Now if it was just me I would have rented another place, but as it isn’t just me I decided to see if I could make buying work.

Had to look outside my old neighbourhood, but I found a house on a big lot, price $330,000. Taxes about $3000/year, rental value about $1750/month. Great deal? No. But one I can live with. There might be some downside on the price going forward, but what matters to me is value, i.e. ownership costs versus rent, not expectation of price changes going forward.

And in that same thread we found out that a bullish poster sold his house and is now renting.

In all sincerity, when a voracious bear purchases, it may signal a top. Market trends often reverse at points like this.

To let you guys in on a secret, yours truly is no longer a home owner. I rent. I do have other real estate interests though.

You may have heard of that internal Conservative Government report on the middle class prepared by Employment and Social Development Canada even though it was never released.

The Canadian Press used the Access to Information Act to get a copy and it’s mostly remarkable due to some of its blunt take-aways:

“The market does not reward middle-income families so well,” says the report. “As a result, they get an increasingly smaller share of the earnings pie” compared with higher-income families.

The report also refers to debt, saying “many in the middle spend more than they earn, mortgaging their future to sustain their current consumption.”

“Over the medium term, middle-income Canadians are unlikely to move to higher income brackets, i.e., the ‘Canadian dream’ is a myth more than a reality.”

Well it turns out that there’s another way to look at the same data, as Finance Canada has just done.

“Their analysis arrives at conclusions — namely that middle-income families have stagnant wages, are unlikely to move to higher income groups, and are increasingly indebted — which appear to conflict with the general message in Budget 2014 and previous internal briefings,” says an accompanying briefing note for Oliver.

The new report points out that moving from single earner to double earner households as more women have joined the workforce has acted to keep the middle class afloat.

The Finance Canada report estimates about 70 per cent of the increase in middle-class household incomes since the mid-1990s can be attributed to higher workforce participation rates, primarily by women workers.

“There is no second wave of women, spouses, entering the workforce,” said New Democrat MP Nathan Cullen, the opposition’s finance critic.

Of course the MP is being overly pessimistic without cause, there’s an obvious next wave of income for households and it doesn’t require polygamy.

The children are our future.

It’s time for Canada to get in line with global economic trends and fully utilize the productivity of the available workforce. We have a large population of potential workers that remain untapped.

Instead of wasting tax dollars and time in school, children could be gaining valuable experience cleaning homes, mining coal or any number of other jobs to help support the household. Lets not squander this bright future opportunity, let’s put the kids to work!

VANCOUVER (The News Desk) — After a long fight with developers, City Hall announced yesterday that Vancouver mayor Gregor Robertson will be demolished to make way for a condo development.

“Gregor is such a recognizable part of this city. We are all very sad to see him go and regret that we couldn’t do more to save him,” said City Hall human resources manager Deborah Swift as she watched construction crews approach the mayor from across the street.

According to documents from Henriquez Parters, the developer, Robertson will be rezoned as “mixed-use residential.” If the application is approved by council, the two-term mayor will be rebuilt as a 16-storey residential tower, with commercial space at street level.

Across the city you’ll see used house salespeople who are having trouble making their german auto lease payments – a decline in the glory days of Vancouver real estate affects us all.

That lost commission translates into a deferred payment to a local auto dealer, who might not buy that extra big ad in the local newspaper. Will that editor buy his ounce of weed this month? Will that grow op have the money to expand?

These are the big issues to consider.

Please.

If you’re thinking about buying a house or apartment in Vancouver BC or know somebody who is, your commission can make all the difference.

But that doesn’t mean you can’t guess at what is going to be revealed tomorrow!

So what do you think the CMHC will announce? Privatization? Tougher underwriting standards? Branching out into commemorative figurines? A new special expert task force comprised of Brad Lamb, Bob Rennie and Angelo Mozilo?

Here’s how news broke on the Sunshine Coast this past Wednesday... Quote:Wakefield Construction bankruptcy ‘a great loss’ Rik Jespersen, The Local Weekly, Sechelt. January 21, 2015. The local construction industry has been rocked by the financial collapse of Wakefield Construction, one of the Sunshine Coast’s biggest and most prolific building companies. Word leaked out Jan. […]

two of these charts concern us: the decline in economic growth in China, and the decline in Chinese property prices: http://www.telegraph.co.uk/finance/econo...t-now.html Might Vancouver be considered a "fourth tier" Chinese property market? Jimmy

The Vancouver Island Real Estate Board released its 2013 Buyer Profile at the end of July/beginning of August which I discovered and downloaded the other day when I grabbed the August stats package. I presented data from the 2005-2012 Buyer Profiles back on July 20, 2013. I am going to take a look at the […]

Given the ever-present, and insistent, discourse about the HPI and its importance as evidence of continuing real-estate-market strength in the lower British Columbia mainland market, I felt that I should point out something that is inherent in the HPI: it is a LAGGING indicator! So, get out your notebooks boys and girls and find your […]

Hey everyone, There are many sale center for new condos and developments all over GVA (Vancouver, Richmond, Burnaby, Surrey, etc). This is my question for everybody here: What are the metrics, or information that you look at, when you visit the new condo sale centers? I will start off with my list: 1. Developer (reputation, […]

Guys Update on where I'm looking - headlines followed by very brief, kindergarten-level analysis, ie nowhere near Skook's incredible levels of scrutiny: Headlines: - inventory at a three year-high (85 properties for sale in my search area) EDIT** - now at 87 as of Saturday 7/5/14...** - one or two properties now on offer at […]

This is a difficult note to write because I tend to be very private when it comes to personal matters; however, to truly understand my silence this past month and what lies ahead I believe I must tell more than I would like to. I am a very sick little marsupial. Two days ago, I […]

Hi Gang I thought Skook, Navier and some others might have some perspectives on this. First of all, the situation: after a long period of inflation, many of us here recognise that certain peripheral markets are topping out, to put it mildly, or in slow multi-year decline. And yet certain sellers, or their realtors, are […]